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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (175233)	10/24/2005 8:31:03 PM
From: Meathead	Respond to of 176387

Good point John but my guess is that it would not improve Dell's profit margins. Re; It would seem to me that if 'Dell has the power to turn AMD into a supersize competitor to Intel' would it not be reasonable to assume that profit margins (around 60% for INTC) could significantly come down and this could be a potentially HUGE difference for Dell if spread across the millions of MPU's they buy? I would surmise that this would be a win for the consumer (lower system prices) and AMD (higher volumes), a pounding aneurism for Intel and just a minor headache Dell. Reason being is that if increased competition from AMD forced Intel to charge less for it's CPU's (i.e. reduced margins), everyone gets them for less, not just Dell. So it's still a fairly level playing field in that respect amongst all the system integrators where their margins should stay relatively stable regardless of CPU cost. That's why Dell has tremendous leverage over Intel. As long as the threat of partnering with AMD remains a 'possibility' and not 'reality', Dell continues to get preferential treatment in a variety of areas. So Intel has been dealing with chipset shortages for a while now and this may continue into the forseeable future. But I wonder who is at the front of the line when Intel hands out those bags of chips? Besides all of the direct model advantages, Dell's relationship with Intel is another major reason why their quarterly performance is so predictable and not riddled with major surprises. I think we'd be amazed at all the potential under-the-table dealings which go on that nobody ever hears about. MEATHEAD